It's Not What They Say, It's That They Say It - The impact of sentiment in M&A press releases

Sammanfattning

Mergers and acquisitions are among firms' most consequential corporate decisions, yet in private-target transactions, investors often rely almost entirely on the acquirer's press release. Using 752 English-language M&A press releases from Swedish mid-cap acquirers between 2015 and 2025, this study combines event-study methodology with textual analysis to examine how sentiment, information disclosure, speaker identity, and regulatory credibility relate to the acquirer's cumulative abnormal returns. Three findings stand out. First, more informative press releases generate stronger market reactions, and positive tone carries greater weight when supported by factual disclosure. Second, target communication is consistently associated with higher abnormal returns for the acquirer, while acquirer sentiment is discounted, especially when the amount of information disclosed is high. Third, CEO statements do not differ measurably from other management comments on cumulative abnormal returns. Together, the results show that in private-target M&A, markets do not reward enthusiasm, they reward credible communication.